Fees & Corporate Actions

The lender is entitled to receive all economic rights including dividends, interest, new issues, and bonus issues from the borrower, except voting rights. The borrower is required to deliver substitute payments to the lender through KSD.

Cash dividends and interest

Paid by the borrower on the payment day to KSD and relayed to the lender on the same day.

Stock dividends and bonus issues

Delivered to the lender through KSD within 3 business days from the day of their listing on KSE or KOSDAQ.

Subscription for rights issues

The lender pays subscription money by the previous business day of the subscription deadline to KSD, which relays the money to the borrower. The borrower then acquires new issues and delivers to the lender through KSD within 3 business days from the day of their listing on KSE or KOSDAQ.

Warrant

In case where the trade counterparts agree through KSD to deliver the subscription right with a warrant delivery for rights issues, KSD receives the warrant from the borrower by the previous day of the subscription day and delivers it to the lender without any delay.

Event of Default

• Cases that are regarded as defaults
  • When the loaned securities are not returned at the predetermined date
  • When the borrower does not pay lender's income entitlements until the payment date
  • When the borrower does not cover the collateral shortage
  • When the fees are not paid until the payment day
• Measures taken against a default
  • In case of Customized Transactions
    The lender as the pledgee can transfer the collateral into its account and liquidate it for compensation. In accordance with KSD Regulation & Detailed Rules and with the consent of the counterparts, the lender and the borrower can request KSD to terminate the outstanding transaction without returning the equivalent securities or not to deliver substitute payments.
  • In case of Bid-Offer, Settlement-coverage and Arranged transactions
    KSD as the pledge liquidates the collateral to buy the subject securities in the market.

Fees

• SBL fee determination
  • Customized and Arranged transactions: the lender and the borrower negotiate with each other
  • Bid-offer and Settlement-coverage transactions: through bids and offers quoted by lenders and borrowers
    - Lower rates precede higher rates in lending securities
    - Higher rates precede lower rates in borrowing securities
    - If fee rates are the same, priority is given according to application time and quantity
• Intermediary fees
  • Fees, which the lender and the borrower pay to the intermediary, are determined as follows;
    - 2% of the SBL fees
    - If the SBL fee rate is less than 1%, 0.02% of the trading value (2 basis point per annum) is charged
    - In the case of 0(zero) percent SBL fee Customized transaction, in particular, the borrower pays 0.04% of the trading value (4 basis point per annum) is charged